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Japanese Tsunami Caused 6 Percent Price Increase for Some Models, ALG Says

The March 2011 Japanese disaster resulted in a nearly 6 percent jump in new-vehicle pricing for vehicles like the Honda Fit, according to ALG, a subsidiary of TrueCar Inc.

by Staff
December 21, 2011
2 min to read


SANTA BARBARA, Calif. — The March 2011 Japanese disaster resulted in a nearly 6 percent jump in new-vehicle pricing for vehicles like the Honda Fit, according to ALG, a subsidiary of TrueCar Inc.

After the Japanese earthquake and tsunami, vehicle production in Japan dropped to record lows of roughly 40 percent compared to the second quarter of 2012. The disruption in production caused a 3 to 6 percent increase in vehicle pricing on some models.

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In April 2011, ALG predicted that a 100-day interruption could result in a nearly 10 percent jump in new-vehicle pricing for some key models, while a 20-day production delay could cause prices to rise approximately 1.5 percent on average, according to the company.

"Japanese production has been slowly restored over the last few months, with August 2011 showing year-over-year growth again," said Eric Lyman, vice president of Residual Value Solutions for ALG. "While supply shortages did push up new-car prices in the short term, a relatively fast production recovery resulted in those spikes being less significant than originally predicted. However, actual pricing increases were within the estimated increases initially forecasted."

ALG looked at two models and actual pricing increases: the Honda Fit and Nissan Rogue. The new-vehicle price for the 2011 Honda Fit grew by roughly 5.6 percent from February to June 2011 compared to nearly 2.3 percent for the entry compact segment. This growth was between the 20- and 100-day scenario initially forecasted by ALG.

The new-vehicle price for the 2011 Nissan Rogue grew by approximately 3 percent from March 2011 to June 2011 compared to a very flat Compact SUV segment growth rate of 0.3 percent, according to ALG. This growth also was between the 20- and 100-day scenario initially forecasted by ALG. Nissan's local production in Japan of trucks and SUVs recovered faster than Honda's small car production, reaching near previous year's levels in May 2011.

For more information, visit www.alg.com/industrynewsletter.

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